[UPDATE: the decision to shut down oil production is already having political ramifications
. According to state media, South Sudan’s President Salva Kiir fired his deputy president and his entire cabinet, and suspended his lead negotiator in talks with Sudan.]South Sudan just announced that it would begin shutting down production at its oil wells in response to a recent confrontation with the North. The move is a direct retaliation to Khartoum’s threat to close two border pipelines that the South relies on to export its oil. The decreased oil production is bad news for both governments, which rely almost exclusively on the production and exportation of oil for their revenue. As Reuters reports
, the shutdown will have ramifications far beyond Africa:
‘1, 2, 4 and 5a shutdown will start July 25,’ Dau said, referring to smaller fields in Unity state. He gave no new production figures, saying only it was less than 180,000 barrels a day last measured on Friday.The shutdown affects oil sales of China National Petroleum Corp, Malaysia’s Petronas and India’s ONGC Videsh which run the oilfields in South Sudan together with the government.”
Last week, north and south had appealed to China to mediate talks, but China hasn’t yet given any indication that it wants to get involved despite the hit to its energy industry. In the meantime, North and South Sudan are spiraling further into another cycle of confrontation and conflict.
[Oil pipeline photo courtesy of Shutterstock